Where Does Market Intelligence Come From?

I’ve been watching Internet audience growth in some major markets over the past year or so, as published by Nielsen//NetRatings in ClickZ Stats. It makes interesting reading. The overall home Internet audience in this assortment of countries is up about 6 percent year on year, but some of the larger markets, such as the U.S., the U.K., and Germany, are showing few signs of growth. Naturally, these overall figures will have changes, but overall reach seems to be plateauing in some markets. The implications are that businesses can’t rely on natural organic growth much longer and are facing a more competitive environment.

My last column outlined my view that Web analytics is much more holistic than what comes out of a Web analytics system. If you’re serious about online business performance analysis, you need a multitude of different inputs. Given the market’s increasingly competitive nature in some countries, having good market information and competitive intelligence will increasingly be an important part of the mix. Most organizations operate in a competitive environment, whether competing for share of wallet, mind, or funding.

Where does this market intelligence come from? A number of different data sources provide information on what’s happening in the market and what competitors are up to. Most of it comes from specialist third-party data providers, some of which you must pay for. Some are global, others only available in specific markets, so you need to see what’s available in your part of the world. Different data providers collect data using different methods. To ensure you use the data appropriately, you need to know how the reports were created.

On the “global, paid for” end of the spectrum, you have services from companies such as Nielsen//NetRatings, comScore, and Hitwise. While their output can look similar, their collection methods vary. NetRatings and comScore collect data from a panel of Internet users, while Hitwise mainly collects its data from ISPs. The panel companies produce volumetric estimates of reach (e.g., unique visitor metrics), while Hitwise produces market share rankings.

At the “free” end of the spectrum, a number of services can provide information on site rankings and traffic volumes. Alexa was probably one of the first on the market, collecting traffic data from people who downloaded and used its toolbar. Other services include Compete and Quantcast, which uses multiple data sources to produce traffic volumes. There’s also Attention Meter, which aggregates data from these various free sources. With free sources, be aware the data quality may not be as high as the paid-for services, particularly outside the U.S.

However, competitive intelligence isn’t just about knowing how much traffic your competitors get compared to you, it’s also about how they’re performing. Depending on what type of business you’re in, you may be able to get information from benchmarking organizations. In the U.K. financial services industry, all the main players pool their data into a benchmarking company, which then aggregates it and supplies it back to the participants with their competitors’ data made anonymous. There are examples of Web analytics companies doings something similar in certain industry verticals, so you can compare your conversion ratios against others in your sector.

Another approach is to carry out your own primary research. Your customers may also be your competitors’ customers, so you can use surveys to understand how people feel about your site’s performance or your business compared to other sites they use within your sector or to reference sites you may want to benchmark yourself against. These types of insights from your own users can be very powerful.

As organic growth begins to ebb away, more organizations will need to know how they stack up in a competitive environment. How do you compare?

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